
Originally Posted by
OldSteve
There is no trend. Each Chapter 11 plan is its own thing. Based on my experience, if, as it appears, the debtor is seeking new capital or an assets sale to a third party buyer, the plan will likely provide for unsecureds getting paid. I haven't seen the schedules, so I don't know how much of the $7.9 million is unsecured. IVO the nature of the biz, I'd be surprised if unsecureds are a big chunk of that. Typically there's a big secured bank loan secured by all assets. And if the debtor was buying inventory on terms, the vendors would have a security interest either per agreement or Article 9 purchase money security interest. My guess is that the debtor filed Chapter 11 to get out of a lease and/or other executory contract to clear the way for a reorg or sale.
Bookmarks